Redstones reverse course and put halt to Viacom-CBS merger

1of4FILE - In this Feb. 13, 2012, file photo, a CBS logo is displayed on the exterior of CBS Scene Restaurant and Bar, at Gillette Stadium, in Foxborough, Mass. Media mogul Sumner Redstone's National Amusements is abandoning a proposal that CBS and Viacom reunite after a 10 year split. National Amusements, which owns most of the voting shares of the two companies, had urged the companies to combine in September 2016. (AP Photo/Steven Senne, File)Photo: Steven Senne, STF

2of4FILE - This Aug. 3, 2011, file photo, shows the Viacom logo at Viacom headquarters in New York. Media mogul Sumner Redstone's National Amusements is abandoning a proposal that CBS and Viacom reunite after a 10 year split. National Amusements, which owns most of the voting shares of the two companies, had urged the companies to combine in September 2016. (AP Photo/Mark Lennihan, File)Photo: Mark Lennihan, STF

3of4FILE - In this Oct. 1, 2012, file photo, Sumner Redstone attends the premiere of "Seven Psychopaths" in Los Angeles. Redstone's National Amusements is abandoning a proposal that CBS and Viacom reunite after a 10 year split. National Amusements, which owns most of the voting shares of the two companies, had urged the companies to combine in September 2016. (Photo by Matt Sayles/Invision/AP, File)Photo: Matt Sayles, INVL

Sumner and Shari Redstone have reversed their marching orders for CBS and Viacom, telling the two companies that they should stop exploring the merger that the family had all but demanded just three months ago.

On Monday, Sumner Redstone, the ailing 93-year-old media mogul, and Shari Redstone, his daughter, sent a letter to the boards of the two media companies stating that "after careful assessment and meetings with the leadership of both companies, we have concluded that this is not the right time to merge the companies."

The Redstones said they had been impressed with the "forward-looking thinking and strategic plan" under the leadership of Robert Bakish, who had been the interim chief executive of Viacom for about a month. Later Monday, Viacom announced that Bakish, a longtime executive at the company, had been named the permanent chief executive, effective immediately.

The Redstones stated that "CBS continues to perform exceptionally well under Les Moonves," the chairman, president and CEO of CBS Corp. "We have every reason to believe that momentum will continue on a stand-alone basis," they said.

The Redstone family controls about 80 percent of the voting stock in CBS and Viacom through National Amusements, the private theater chain company started by Sumner Redstone's father.

The development continues a roller coaster year for the $40 billion entertainment empire that included court battles in three states, the ousting of Viacom's chief executive and now a complete turnaround on the call to combine CBS and Viacom. The proposed all-stock deal would have left the family in control of the combined company.

In September, the Redstones sent a blunt and public letter to the boards of CBS and Viacom, urging the two companies to explore a deal.

Last month, Shari Redstone continued to advocate the deal during the annual DealBook conference in New York. She said that it was more important than ever for entertainment companies that create content to grow in order to improve their leverage against powerful distributors like Comcast and AT&T.

She did say, however, that it would be possible for the two companies to remain independent: "They are two strong companies, and they both will survive."